"Someone is sitting in the shade today because someone planted a
tree a long time ago."

Think of planting a tree as saving, and the shade it provides
later in life as wealth.

As Romans points out, time is key here. A tree
takes time to grow, and so does money.

"Investing your savings over time grows wealth," the author
writes.

Why is time so important? Because of the
power of compound
interest, which is basically when interest starts earning
interest on itself.

Romans breaks this concept down into a simple calculation, which
she calls the prosperity formula.

Earnings — Spending = Savings

Savings x Time = Wealth

As a real life example of this, the author
cites a study done by Fidelity Investments, which studied "the
habits of people who earned less than $150,000 a year but had
retirement account balances topping $1,000,000."

According to Romans, the people in this study "started saving
young, and they socked away a big part of their
paychecks." The author says that they saved 14% of their pay
every year, and that's before any company matches to their
retirement contributions.

Romans also highlights the fact that the study participants were
willing to take on more risk since they were young. "They weren't
too conservative in their portfolios," she says. "The younger you
are, the more stocks you should own. In fact, on average, they
had 70% of their retirement savings in stocks."

Keep in mind that your portfolio should change as you get older,
though. For a breakdown of how much you should have invested in
stocks and bonds, take a look at
another basic formula.